Anna Manning

President and Chief Executive Officer

Reinsurance Group of America (RGA) enjoyed another successful year in 2017, establishing records for premium, revenue, income, and earnings per share. These strong results were broad-based, reflecting significant contributions from all of our business segments across RGA’s diversified global platform. The year’s performance once again demonstrates the strength of our enterprise strategy as RGA professionals worked to deepen and build upon our core businesses, capitalized on emerging opportunities, and improved our operational efficiency and effectiveness. I am particularly proud of how this year’s accomplishments underscore the talent, passion, and urgency RGA employees bring every day to execute our vision of being an integral and trusted partner, a respected leader, and a long-term value creator.

Net income in 2017 reached $1,822 million, or $27.71 per diluted share, versus $701 million, or $10.79 per diluted share in 2016. The Tax Cuts and Jobs Act of 2017, enacted in the U.S. on December 22, 2017, created a tax benefit that RGA recognized as a one-time increase in net income of approximately $1.0 billion, or $15.72 per diluted share. This increase provided a significant boost to our balance sheet and capital position, and we expect ongoing benefits from a reduced effective tax rate for RGA as well as a more level playing field with our global competitors.

Pre-tax income totaled $1,143 million, a 9% increase over 2016 and the highest level ever achieved by RGA. Net premiums were $9.8 billion, a 6% increase over 2016, and thanks to significant contributions from our diversified portfolio of businesses, revenues reached $12.5 billion, representing a 9% year-over-year increase.

Our U.S. and Latin America traditional operations built on a strong 2016 to deliver results in line with expectations. Net premiums surpassed $5 billion for the second consecutive year reaching $5.4 billion, with pre-tax income totaling $373 million. Notably, the U.S. individual mortality underwriting team received its three millionth facultative case in 2017, an unprecedented milestone and a testament to RGA’s long-standing leadership in this market.

Relatively flat premiums coupled with unfavorable claims experience in healthcare excess business resulted in a challenging year for our U.S. group operations, following a favorable 2016. We expect this short-term volatility to level out over time. Client retention remained strong, and with expansion into promising new market segments, we see positive long-term growth opportunities. RGA is working closely with our clients to develop sustainable solutions given the uncertainty surrounding the U.S. healthcare landscape.

RGA celebrated our 25th anniversary in Canada with an 11th straight year as the market’s individual life reinsurance leader, producing pre-tax income of $120 million in traditional lines of business. We are partnering with our clients to expand their breadth of offerings to meet market demand, particularly in the living benefits space. We are also leveraging our expertise with regulatory regimes in other markets to develop innovative reinsurance structures and customized capital solutions to help our clients with upcoming regulatory changes in Canada.

Our Asia Pacific operations produced an outstanding year. Pre-tax income in the region’s traditional business totaled $149 million, a 31% increase over 2016, driven primarily by organic business growth. Net premiums increased 22% over 2016 to reach $2.1 billion, marking the first time this segment surpassed $2 billion in annual net premiums. We see continued growth opportunities in the region as demographic trends drive consumer demand for innovative product solutions, an area in which RGA is well-positioned to assist our clients.

A HISTORY OF STEADY GROWTH

(As of December 31, 2017)

Total Assets

$60.5 Billion

(24-year CAGR, since IPO)

Book Value Per Share

$148.48

(24-year CAGR, since IPO)

Market Capitalization

$10.1 Billion

(24-year CAGR, since IPO)

“This year’s accomplishments underscore the talent, passion, and urgency RGA employees bring every day to execute our vision of being an integral and trusted partner, a respected leader, and a long-term value creator.”

We also see positive developments in Australia as ownership of insurance operations shifts from banks to global insurers, offering greater potential for a long-term sustainable market. RGA is well-positioned in Australia, providing a sound platform for profitable growth.

RGA’s Europe, Middle East, and Africa (EMEA) traditional segment finished the year with pre-tax income of $71 million compared with $30 million in 2016. Our operations in France and Italy celebrated their 10th anniversaries as we continued to strengthen our position in Continental Europe. Across EMEA, RGA is leveraging our broad range of capabilities to meet the risk and capital needs of clients through ongoing product development and innovative reinsurance solutions.

Global Financial Solutions (GFS) once again performed very well, generating pre-tax income of $555 million, a 28% increase over 2016. Notable transactions included an asset-intensive transaction in the U.S. that increased RGA’s invested asset base by approximately $2.3 billion and an asset-intensive transaction in the U.K. through which RGA is reinsuring over $1 billion in individual annuity business. GFS also executed a number of other transactions around the globe, contributing to particularly strong performances by our capital-motivated line in the U.S. and growing asset-intensive business in Asia. RGA deployed over $225 million into in-force transactions in 2017 and ended the year with $1.4 billion in excess capital. The pipeline for our transactions business is active and we believe U.S. tax reform and the potential for higher interest rates could create additional global opportunities.

To increase our ability to execute larger transactions, we created RGA Capital Partners (RCP) in 2017. RCP launched its first reinsurance vehicle, Langhorne Re, in partnership with RenaissanceRe Holdings Ltd. (RenaissanceRe) and is targeting large in-force life and annuity blocks.

New Standard in Facultative Underwriting

RGA remained the industry leader in large-amount and substandard risk underwriting, recognized for rapid turnaround times and superior facultative expertise. RGA underwriters reviewed a record 673,850 facultative cases in 2017:

International

United States

Canada

Langhorne Re entered 2018 with $780 million of long-term capital commitments, including commitments from RGA, RenaissanceRe, and third-party investors. We are excited about the potential for Langhorne Re to bring additional competitive and flexible solutions to market.

RGAx, a subsidiary of RGA and our global innovation accelerator, worked with clients and partners worldwide to combine technology, new sources of data, and other advances in order to develop a new generation of consumer-focused insurance solutions. In January 2018, RGAx entered into an agreement to acquire LOGiQ3 Inc., a group of companies providing technology, consulting, and outsourcing solutions primarily to the North American life insurance and reinsurance industry. With the addition of LOGiQ3, RGAx has significantly expanded our capacity and capabilities across the insurance value chain.

As we look to the future, RGA is well-positioned to anticipate and capitalize on the ongoing changes in the life and health insurance industry. We have a strong balance sheet, a diversified portfolio of businesses, and a global operating platform from which we continue to innovate. We bring a proven strategy and a long track record of successful execution. Our people, culture, and strong multi-level relationships with our clients give us great optimism for a bright future.

Together with CEOs of many of the world’s leading companies, I had the privilege this past year to add my name to the CEO Action for Diversity & Inclusion, a pledge to advance diversity and inclusion in the workplace. At RGA, diversity goes beyond considerations such as gender and ethnicity to encompass the way we think, the way we behave, and the culture we foster. We understand that our strength stems from our people and that the more inclusive we are of the diverse views and opinions held by our employees, the better the outcomes for our clients. It is this understanding that has fueled our expansion into new markets, new product lines, and new business models and will drive our continued growth and success in the years ahead.

I would like to thank RGA’s dedicated employees, clients, shareholders, and partners for making 2017 an outstanding year. I look forward to continue working together to build a stronger company and a more resilient and sustainable industry for the many people who depend on our solutions.

Anna Manning

President and Chief Executive Officer